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Eastern forum about the fields
EastRussia analyzed the agrarian agenda of the fourth WEF
They fed their own, we will sell to our neighbors: Russian agriculture is switching from providing the country's population with food to the priority development of exports of agricultural products. The presidential "new May decree" sets the goal of doubling exports, to $ 45 billion a year, by the year of the year, the corresponding federal project has already been submitted to the government. The Far East does not stand aside, and at the fourth Eastern Economic Forum in Vladivostok, the agrarian theme was focused on two issues: what kind of Far Eastern agricultural products can be sold (section "Integration of the Far Eastern Agriculture Sector into the Food System of the Asia-Pacific Region") and how to take it there (section "Agrologistics").
Lev Kolomitsindependent analyst
Assessment of the state of health of Far Eastern agriculture by the section participants was optimistic. Valery Dubrovsky from the "Agency of the Far East for attracting investment and export support," noted that for the period from 2013 to 2020, the state support of the sector will be more than 1,55 trillion rubles, and outlined the prospects for its growth in various indicators. In particular, the area of arable land can be increased from today's 2,2 million hectares to 4,4 million hectares, harvesting of cereals and soybeans - from 2,1 million tons to 11-13 million tons (in 6 times), pork production - from 54 thousand tons to 2 million tons (37 times), poultry meat - from 58 thousand tons to 1 million tons (in 17 times), milk - from 315 thousand tons to 4 million tons (in 13 times), oils - from 90 thousand tons to 0,3 million tons (in 3 times). Thus, the south of the region has a huge investment attractiveness for potential investors, but they are repelled by long payback periods, which is explained by the need to invest in transport, energy and other infrastructure.
Maxim Basov of Rusagro announced an increase in production in the Primorye Territory of corn and soybeans by two times for 7 years due to expansion of arable land and crop rotation. The yield should grow from 2 to 3 t / ha in soybean and from 7 to 9 t / ha in maize. Pork production and dairy farming will be expanded with deep processing of milk into cheeses. By 2020 Rusagro plans to reach the planned level of pork production, which so far only goes to the domestic market of the Far East, hopes of entering the closed Chinese market are connected not least with the plague epidemic in China, which caused destruction 24 thousand pigs from 500 thousand livestock. The best way to promote pork to the Chinese market is to regionalize our pork as a regional, free from ASF. "Rusagro," Mr. Basov said, is the world's fifth largest pork producer in the world with low production costs due to cheap feed, the company plans to enter the markets of Japan, the Republic of Korea and the Philippines.
REALITY: 1% FROM THE COST OF IMPORT OF FOOD TO ASIA
The WEF said that the Far East has unique geographical opportunities for a "short shoulder" in relation to the largest importers of agricultural products. According to ITC data provided by Valery Dubrovsky, countries of East and South-East Asia annually import food products worth $ 270-310 billion. In 2017, China, Japan and Korea imported more than 7 million tonnes of meat (3 million tonnes of beef, 2 million tonnes of pork , 1 million tonnes of poultry), 63 million tonnes of cereals (including 14 million tonnes of wheat and 27 maize), 3 million tonnes of dairy products and over 100 million tonnes of soybeans (mainly China). At the same time, the share of the Far East in these volumes does not exceed $ 3 billion, or 1%.
The explanation of this indicator is contained in the structure of exports, which is dominated by agricultural products with low added value. According to Deputy Minister of Agriculture of Russia Sergey Levin, the gross volume of Russian exports is large, but its specific cost is about $ 300 per ton, while finished products are imported four times more expensive. In order for the existing models of export growth to work, a minimum of 30% is required to increase the cost per ton of products.
For the development of exports in the state program to support the agro-industry, a corresponding subprogram appeared. According to Sergei Levin, the industry's GDP is 5,6 trillion rubles. per year, to achieve the task ($ 45 billion a year), it should be increased by 1,7-1,8 trillion rubles, which, in addition to production, will increase the burden on logistics several times. For the Far East, this risk is higher than for the more developed territories of Russia. While the natural advantage - land border with China - is used by the local economy inefficiently.
The main obstacle to expanding exports is the lack of external transport infrastructure and internal infrastructure of agriculture. Maxim Basov called such elements as roads, gas, drying capacity, elevators and terminals. The development of infrastructure in Primorye is slow, and does not depend on the plans of seaside villagers, but on the strategies of Chinese (and, probably, Japanese) buyers. In the absence of capacity, companies have to design workarounds: for example, Rusagro ships to 100-150 thousand tons of corn through Korea, since seaports are not equipped to form ship lots of grain.
Alexander Sheneryuk-Zhidkov ("Commonwealth") shared the view on the transport infrastructure as the main obstacle to export development, but this is not the only condition. To strengthen the export positions of the Far East, it is necessary to carry out four actions. The first: to create equal rules of the game for all market players ("sellers of soybeans for $ 200-250 in the Amur region - this is unfair competition and lost taxes"). The second: to maintain unchanged economic conditions of activity. In this context, the speaker mentioned the export restrictions discussed by the government for Siberian and Far Eastern companies, which hampers the investment plans of the business. Third, the state should help small-scale producers and develop not only ports and hubs, but also internal infrastructure such as agro-logistics centers, one of which "Sodruzhestvo" builds in the Amur region. Fourth: to introduce a crop rotation. It is known that soybean under constant cultivation depletes the soil, and because of the growing Chinese demand, its production in Russia for the last 10 years has grown five-fold. The absence of crop rotation in many farms is due not to the evil intent of owners, but to the inability to use other crops, such as wheat, because they do not have money for seeds and other required resources. The allocation of current assets by the state will allow it to be used.
The Russian export center, for its part, is trying to compensate for the infrastructure deficit by subsidizing the transportation of agricultural products: as the REC director Andrei Slepnev noted, the volume of subsidies is planned to increase to 1-1,5 billion rubles. In addition, the center launched a special export train to China along the Vorsino-Chendu route, which has both conventional and refrigerated wagons. Mr. Slepnev proposed to link the created network of wholesale distribution centers (ORC) with these trains. To implement such a plan, a responsible logistics operator is required, whose task will be to recruit and send a certain number of trains per month / year; its activities will help to synchronize plans of agrarian companies for the production of marketable goods with the development of infrastructure.
DELIVERY: SPECIALIZED SHIPPING CAPACITIES NEEDED
Export agricultural logistics is not ready for new challenges - such a conclusion could be drawn from the report of Dmitry Krasnov (Ministry of Agriculture): with a twofold increase in exports and maintaining the depth of processing at the same level, traffic will increase by 2,2 times. Comparison of conditions of transportation of products in Russia and in other exporting countries shows that the Russian producer incurs higher costs - for example, Russia has the highest port tariffs. The cost of grain in US ports is 8-12 USD / t, Australia - 11-17, Brazil - 5-6, China - 2-5, Russia (Vladivostok) - 15-18. The volume of investments in the transport infrastructure of the Russian Federation is much lower than in other countries.
According to the forecast of the Ministry of Agriculture, the consumption pattern in the sales markets adjacent to the Far East has a trend of growing demand for high-grade products. According to Mr Krasnov's calculations, the export of agricultural products from the Far East can reach $ 4 billion from today's $ 2,8 billion due to an increase in the level of processing by 30%, as raw raw materials are exported from the region (80% - seafood). Optimistic estimates reach $ 12 billion.
At the same time, the transportation of deep processing products places higher demands on the logistics infrastructure, in which world trends are digitalization, containerization and Internet commerce. In Russia, the degree of containerization of the railway is only 6%, in Canada this figure is 6 times higher.
The cross-border infrastructure should be modernized: the state allocated 30 billion rubles of additional funds for the modernization of 24 border checkpoints, 13 of them in the Far East. For 5 years, their condition should drastically change.
The growth of grain exports to Asia is hampered by the lack of specialized terminals in the region. Grain can be loaded into containers and delivered to anywhere, but for this there are no capacities in the ports - said Vyacheslav Bakaev (group "Summa"). We need "rear areas", on which sorting of large quantities of food products for export, from wagons to ships, could be made. Foreign investors are ready to invest in such sites. They can also develop primary processing, as it is in Europe - for example, flour. We also need cheap and efficient refrigerated transport, the cost of which in the Far East is high today. Mr. Bakaev suggested using empty containers, which are returned to China from the EU, to ensure Russian exports of food products, which requires the modernization of loading and unloading operations.
Andrey Hollandtsev ("Slavtrans-Service") presented the audience with "agrohab", which his company creates in the Primorsky Territory. Its key element is the "dry port" in Ussuriysk, a logistics and warehousing platform that provides access to the Trans-Siberian Railway, where a wholesale distribution center for agricultural products is being built. Agrohab also includes the trade and exhibition complex "Pogranichny - Sunfeihe" and seaside ports specializing in trans-shipment of agricultural cargo. Mr. Hollandtsev showed the participants of the section a "triangulation" scheme, which should solve the problem of returning empty freight cars: it is the route of China-Moscow (through Central Asia) -Siberia-Far East-China, thereby ensuring reverse loading.
The main problem now is the ability to track containers, for which it is necessary to create an IT platform that will verify all data on the shelf life of products, manufacturers, temperature regimes, and will allow synchronizing supplies with obtaining veterinary certificates, thereby increasing consumer confidence in Russian products. The platform should exclude the possibility of business intervention in the data, provide data transfer via GLONASS - this, among other things, and securing commercial secrets, as the volatility of prices for perishable products is higher than in the foreign exchange market. In addition, such a platform will overcome the barrier of veterinary barriers, which are a big problem for Russian producers.
Two more speeches were devoted to the topic of ORC. Alexei Vanchugov (RosAgroMarket) cited data on which almost 40% of vegetables deteriorate during storage and transportation, which makes Russian production uncompetitive in the foreign market. The storage infrastructure is not updated everywhere, therefore, the ORC should reduce losses. In addition to logistics, they will also perform production functions, providing users with a line for cleaning and packaging products. IT systems, according to Mr. Vanchugov, are also an important element of trust between wholesale participants, which today is built on trust within the ethnic groups that deal with it.
Nikolay Tsekhomsky (Vnesheconombank) characterized the large project of the ORC network, which can become the backbone of the distribution system for fresh agricultural products ("fresh"). The food market in the country is 8% of GDP, it is more than 13 trillion rubles. half of them are fresh. And most, more than 30%, fresh is in the gray zone: this production is distributed chaotically, quality is not provided, taxes are not collected from it, its price varies greatly in seasons, which affects inflation. This is a big problem for the country. The ORCs should become a "distribution pipe", which will allow them to be used as an element of pre-export.
PRICE OF FOREIGN INVESTMENTS: PRESSURE ON THE LOCAL MARKET
There is no doubt that the joint efforts of the state, transport workers, logistics and producers within five to seven years, the infrastructure for the export of agricultural products in the region will be expanded and updated. The task of increasing the level of processing of export products seems to be more difficult, since the access control regulators to the main export market - the PRC - actively protect it from penetration of imported products, guided by the principle of "importing as much cheap raw materials and as few finished goods as possible."
Chinese investments in Far Eastern agricultural projects, for which even a special joint bank was created, are also oriented towards the production of raw materials. In cases where Chinese investors invest in the final product, it is not intended for export to China, but primarily for marketing in local markets. For example, Sun Guoqiang (president of Zhongding Dairy Farming, investing in milk production in Primorsky Krai) said that his company's primary goal is to meet the needs of the local market, only after that it is planned to start exporting. A similar policy is adhered to by the Vietnamese company TH True Milk, which intends to produce dairy products in Primorye and sell it under its own brand in the local market. Thus, Asian investors will increase competition in a small and, in general, rather tight domestic market of Primorye, thereby increasing risks for local peasant and farm economies.
The plot with the increase in soybean production is very relevant for the Far East, since this culture forms the basis of grain exports to China (3 million tons), while the demand is three times more (up to 10 million tons per year), the Chinese are ready to invest in soy production. Nevertheless, the prospects for such a development are unlikely, since there is no free land in the south, and the increase in yield is constrained by a number of factors, including soil depletion in the absence of crop rotation and free money from producers. For more details, see, for example, here. Such disagreements between the strategies of various market participants inevitably generate tension that does not promote productive joint activities, which must be removed through regular, meaningful communication between them.